Debt Reduction While Planning a Career Change – Beckey Answered

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Can I change careers with loads of debt?

DFA reader Beckey asked:

I need some advice. I am currently working the IT Support field but am finding myself bored and tired of the work. I’ve always wanted to become a Veterinarian so now I’m thinking of a career change. I’ve been looking around at some local schools and one of them has a 2 year Veterinary Technician degree that I think would be great for getting my feet wet to see if I in fact would love this field. I’m thinking of going part time, so I can still work either part time or full time to help with the income. The only problem is, between my boyfriend and I, we have almost $50,000 in debt (both had bad breakups with exes, he has school loans). We have been aggressive with paying off our debt and actually paid off 4 credit cards last year. We have our plan in place to become debt free, by October 2012, so we are both full speed ahead on paying off our debt. I’m not sure what to do here. I don’t really want to stay in my current job but can’t afford to not have that income.

Work hard

Hi Beckey… let me start by saying that I love your question.  It conjures visions of a happy optimist with shackled dreams – held back by poor financial choices from her past but eager to do things right this next time around – an all too familiar story.  After carefully pondering your situation I think you have a good idea of what needs to be done… so my advice should ring true as we work to help you devise a solid strategy.

The single best advice I can give is to work harder than ever.  You still need the income from you IT support job until the $50,000 debt is repaid so do not quit.  If you absolutely cannot stand your job just be sure to find another with similar compensation before leaving; perhaps grunt labor in the field of veterinary medicine?  🙂

If you can pay for classes without going into more debt then go ahead and follow your desire to start school while working.  More on this later.

Set, prioritize, and achieve your goals

Speaking of goals, what are yours?  Have you ever written them down?  Let’s try to help you set your first goal so you can effectively prioritize your actions.

It sounds like you biggest desires are:

  1. Debt reduction
  2. Career change

What do you despise more… the debt or the IT support job?  Will it feel better to pay off the debt or to get out of that job?  Before you answer remember that the debt is what’s keeping you in the job.  😉

It sounds like you have a solid understanding of debt slavery and are eagerly working a plan to get out.  You desire a career change but your debt has you shackled to a position you dislike only because delivers a way to repay the debt.  Sounds like slavery to me!  Therefore debt reduction should be your first order of business.

Note: a second job would accelerate debt reduction and the ability to follow your dreams – whatever they may be!

Here is what I would do:

Pay off debt before going into more debt

You do not mention how you plan to pay for Veterinary school.  Can you pay as you go or will you need to take out student loans?

Since debt is what got us into this mess in the first place it only makes sense to avoid further bondage until existing debt is gone.  If you must borrow for school then do so after October 2o12 or whenever your existing debt obligations have been met.

I am not saying you cannot borrow money to fund education – though I usually advise against it – I am saying you should not add to existing debt with more debt.

Assure yourself before making large life changes

Also… are you absolutely sure you will love the work of a VT?

To be completely honest with you, it does not sound like you are entirely sure veterinary medicine is the cure for your career discontentment.  Read your sentence again, “I’ve been looking around at some local schools and one of them has a 2 year Veterinary Technician degree that I think would be great for getting my feet wet to see if I in fact would love this field.”

Are you convinced that veterinary medicine will make you happy?  How long have you worked in IT Support?  Make sure that you are not trying to project dissatisfaction in other areas of your life onto your current career.  Also, make sure you are not suffering from The Grass is Always Greener Syndrome.  I bring this up because it is very important.  The last thing you need to do is spend thousands on education only to wind up right back where you started.

In closing

Focus on accelerating debt reduction while assuring yourself of the best career move.  Consider working a second job to speed debt reduction and freedom.  Once you can confidently vouch for your passions consider getting a grunt job in the field so you can get an everyday working feel for the industry.  After your debt is gone… go do whatever your little heart desires!  Well… within reason of course.  🙂

What do you think?

What are some tips I may have missed that Beckey should use to get out of debt and into life?

photo removed at the request of Mareen Fischinger
If you need personal finance advice… ask Matt Jabs.

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1 BG

I agree Matt, hers is a perfect example of debt slavery. You just can’t do the things you want in life, when you are under a mountain of debt (broke).

I personally think that if Beckey has a good paying job right now, in this economic environment (and with that debt), she needs to hold onto her current job and use that income to pay down the debt as fast as she can, after she has accumulated a sufficient emergency fund.

If the consumer debt payoff is taking upwards of three years, then you are not doing something right. Paying off consumer debt should take at most 18-24 months, if you are serious about it. If it is taking longer, then you need to sell whatever it is you have debt against (financed TV, car, etc?)

2 Ronnie

I have to disagree with the statement that consumer debt should take AT MOST 18-24 months if you’re serious. It makes the assumption that life doesn’t intervene, which it can and does. My hubby and I were able to pay off over $10,000 out of $25,000 of credit card debt, then his father died. We had savings, but were moving to a new location within the next 2 months, and couldn’t fund both with our savings. In fact, we had to use our credit cards to get down to the funeral, and then hubby lost his job because he stayed down to help his mom figure things out (dad handled everything, a big no-no here!!). He’d been working as an independent contractor, hence taking time off meant no job when he returned. We had debt against plane fares, hotel lodging, etc. Nothing to return. Based on these facts, I don’t know that we can assume there’s more, than perhaps getting another job, that she can be doing. Just my opinion.

3 BG

Ronnie) You should plan on taking 18-24 months (max) — whether you make it depends on what life throws at you (like in your case). But if you plan to take 3-5 years to get out of consumer (non-mortgage debt), then you should really look at selling stuff that you have the debt against and/or a second job for additional income to get down to 18-24 months (max).

Hope thing are going well for you now!

4 Ronnie

Things are much better, thank you! Last year was a little rough. What is your opinion on student loans though? I ask because I have close to (gulp) $200k in student loans. Hubby has $150k in medical school loans. Even putting every ounce of combined income possible towards them, we’d still be talking years before being able to pay them off. Our other debt (all mine, prior to marriage) will be paid off by next April, but the concept of waiting to pay those off before living the rest of my life (e.g. go on vacation, start a family, buy a house) rings somewhat hollow. Your thoughts?

5 Robert Espe

Ronnie,
Remember that debt steals from your future standard of living. Going on vacation and buying a home are luxuries, and you will have better ones later if you pay off your debt now, even though it is hard at this end. Children however, are a natural part of life and I let God control when mine will come, so I wouldn’t say you have to delay them. Just don’t use children as an excuse to add to debt.

Regarding the size of your loans, I hope for your sake, that you both have 6 figure incomes to go with the 6 figure loans? Whether you do or do not, the key to paying them off is the same: you must spend far less than you make. You must live as close to the poverty line as you can manage. This often is harder the more a person makes, because it is not easy living below your friend’s standard of living.

I got married with no debt, but my wife came with $18k worth. Our combined income for our first two years of marriage was just under and then over $20k. But we paid off that debt in 2 years. It took sacrifices. A $300 honeymoon. No fun purchases, only $20/month for us to eat out together twice. Looking back now, it was so worth it. I make about $60k/year now. We still live on less than $30k. Having no debt means we are saving more than $25k/year towards our first home purchase.

If one assumes that being debt-free before buying the things they want is impossible, for them it will be. You can’t maintain your colleagues’ standard of living and have less debt. “Live like no one else WILL now, so later you will live like no one else CAN.”

6 Ronnie

We do have 6-figure incomes to go with our 6-figure debts, but we’re fortunate. I’m an attorney doing okay, and much better than most with the same debt and no job anymore, but hubby won’t hit 6 figures for a while since he’s still in medical residency. We get that by going on vacations now instead of paying off debt we may be setting ourselves up, but after hubby’s dad passed, and he and wife hadn’t taken their first vacation after 36 years of marriage, we decided that we needed a balance that we didn’t have just paying stuff off. So that is really a conscious choice, and we’re okay with it.

7 BG

I second Robert — hopefully those student loans are affording you very well paying jobs. But the amount of debt doesn’t matter much to me. Its more about the debt-to-income ratios. There is not much difference between someone earning $40k a year with $80k debt, and someone earning $200k a year with $400k in debt.

As for me, I am attributing 50% of my take-home pay towards debt repayment (married w/ 2 kids). I think this is achievable for most people. If your lifestyle won’t let you live on only 50% (or less) of your takehome, then reduce your lifestyle.

8 FinancialBondage

With lots of debt and little cash saved, it can be tough leaving a job. Not impossible, but tough.

I have been working on my debt reduction for 5 years… made great progress working extra jobs but I’m not debt free yet. life happened during that time…. pay was reduced, transmission went up, electric bills got much higher… add to that the fact that I don’t make much $ to begin with… it makes snowballing the debt much harder. And a slower process. If I made more $ my debt would have been done two years ago. Wish I was done with it in 18 months. Didn’t happen

9 karyn

Maybe she could take on a part time vet job to help pay down her debt more quickly (or to save up for vet school). In this way, she’ll still have her IT job to pay for the large debt but she be further improving her finances while also checking out her potential future career. If she can’t find a vet assistant job, even helping at a local shelter will help her get into the field and make professional connections. I would just be wary of the grass is greener syndrome, as you suggested.

10 Ann

Karyn, you took the words right out of my mouth…helping at a shelter would be a good way for her to get into the field and to make connections. She would also get a taste of what it would be like working around animals and decide if it is really for her.

11 Beckey

I have volunteered at a rescue league for a while and I loved it. I’ve also nursed many pets that I have rescued back to good health and then found homes for them. I’ve also had the sad part of the job in having to have an animal put down due to health reasons. I don’t plan on taking on any more debt, and am looking into any scholarships that I can get. I also plan on staying at my current job and paying debt down with my boyfriend. We have already sold off many items around the house and turned that money into debt repayments. I do think I will be looking around the area for any part-time work at any Vet clinics, that was a great suggestion! I definitely do not want any additional debt, so I will search for alternatives and wait if necessary, before going through with this plan.

12 Kate

You can ignore my suggestion about working in a vet’s office, I didn’t see this comment before I posted! Good luck to you Beckey – and feel free to live with your boyfriend whether you are Christian or not – ignore Robert.

13 Robert Espe

Beckey,
Two things about your situation.

One, just because you work in IT, does not mean you ARE an IT tech. You are Beckey, who is many things, and pays her bills by working in IT. Don’t equate your value with your occupation. This may make it easier to delay a career change until it can be on your terms.

Two, you say you have a debt re-payment plan with your boyfriend (who it seems you are living with). I don’t know if you are a Christian or not, but setting aside that a Christian woman ought not to be living with a man who is not her husband, from a strictly pragmatic point of view, It is unwise to pay off the debts of someone who has not made a commitment to you in marriage. No matter how much you love each other, the absence of commitment means he can leave (after you’ve paid his debts) and you would bear the loss without legal recourse. If you want an effective, team effort to eliminate debt a provide a better life, it should include the promise that you will both continue together in marriage to enjoy the fruits of your hard work.

14 Kate

Great article Matt! I am actually going to forward this to my friend as she was just talking about a career change and is having the same issues as Beckey. Speaking from experience, I know what it is like to be miserable in your job and to think the only way to remedy that is with a big change. Luckily, I found a job in marketing that I love and get compensated fairly comparable to the job I hated.

Good luck Beckey, I hope you take Matt’s advice and decide which you hate more – the job or the debt. Then also see how much more in debt going back to school would generate.

I will say, my aunt who is in her 40’s recently went back to undergrad to take all of the sciences that she needs to get into Vet school. She is loving it, but was working with horses many years before making the decision. Maybe try to find a job working at a local vet’s office part-time or on the weekends to see what it is all about and make extra money to pay off your debts!

15 Beckey

Ironically, a local vet hospital just posted for a part time receptionist position. Might be a sign… 🙂

16 Matt Jabs

Awesome Beckey!! We’re rooting you on… go for it.

Here’s my advice – don’t go “apply” for the job… go “claim” the job! Do this by displaying your passion for the work… being as flexible with your schedule as possible… explaining your story and situation to them… and showing them how badly you want that job and how you are the perfect candidate for it!

And be sure to come back here & update us with the results! I’ll pray for you. 🙂

17 Beckey & Jeff

So, while I didn’t get the Vet position, I did find another position in the IT field. My current job was really causing me to be negative and slightly depressed. I start next week at the new job and it is $5/hr more than current job. That will help us pay down our debt a bit faster. Thanks for all the posts and I will keep looking for vet hospital positions.

18 Mareen (the photographer)

Please remove my image ASAP. It is being licensed solely by myself or Getty Images! Please read and respect copyright notes.
Thank you.

19 DVM

If you are worried about debt, veterinary medicine is NOT the career to switch to. Our debt-to-income ratio is the worst of any profession in the country. Our debt is equal to that of medical students, but we end up with less than half the salary. Most veterinary students graduate with ~$150,000 in student loans, and they can easily be double that if you go to an out-of-state school. (Keep in mind, this does not cover undergraduate education to get the prerequisites you need to apply to vet school) Average starting salary is $50,000-$65,000, depending on where you practice. If you choose to do an internship after graduation, expect to make less than $20,000 for that year, and if you continue to a residency, expect $30,000-$40,000/year for the next 3-5 years. Also, most employers include a clause in your contract that does not allow you to work extra jobs. To pay off my debt in 10 years, it will cost $1500 monthly, and I likely will not be able to qualify for a mortgage during that time. (Note: I understand that renting is sometimes a wise financial decision, but being forced to rent for 10 years is a different story) So, if you are serious about entering the veterinary profession, please think LONG and HARD before you start.

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